Deciding how much to charge for bookkeeping services can be tricky for new and aspiring bookkeepers. Rates can vary greatly depending on your experience level, credentials, location, the scope of services provided, and client size and industry.
In this blog post guide, we will provide you an in-depth guide on pricing considerations and typical ranges for bookkeeping rates to help you determine a competitive yet profitable fee structure.
Factors Impacting Bookkeeping Rates
When setting your bookkeeping rates, some key factors to consider include:
Experience Level and Credentials
More experienced bookkeepers and those with higher credentials like a bachelor’s degree in accounting or bookkeeping certifications can justify charging higher rates. Beginners may need to start on the lower end until they build up expertise.
Location
Bookkeeping rates also tend to fluctuate based on geographic location and cost of living. Usually urban areas command higher prices compared to rural locations.
Scope and Type of Services
The specifics of services provided impact rates. For example, monthly retainers for recurring services like data entry or reconciliation may be priced lower than project-based work. Specialized services like payroll, inventory management, or financial report production warrant higher pricing.
Client Size and Industry
Larger clients and those in specialized industries like healthcare, legal, or nonprofit can support higher prices. Small businesses in general industries tend to have lower budgets.
With this context, let’s explore typical bookkeeping rates.
Entry-Level Bookkeeping Rates
Those just starting out without formal credentials or appreciable experience may charge around $15 to $30 per hour. At this stage, work may center on basic data entry, bank reconciliation, payroll processing, and generating financial reports.
As skills develop, rates can incrementally increase to $30 to $50 per hour. At this level, bookkeepers can handle tasks like accounts receivable/payable, fixed asset depreciation, inventory accounting, and more advanced reporting.
Mid-Level Bookkeeping Rates
For bookkeepers with a solid base of clients and roughly 3 to 7 years of experience, typical hourly rates range from $50 to $70. These rates apply to skilled bookkeepers pursing certification or with an associate degree in accounting/finance fields. In addition to the aforementioned services, responsibilities may expand to include budget preparation, auditing financial data, and advising clients on recordkeeping processes.
High-Level Bookkeeping Rates
Experienced credentialed bookkeepers with 5+ years of experience usually charge between $70 and $100 per hour. Many operate independent bookkeeping practices and serve higher profile clientele with more complex needs like system integration, software customization, CFO services, and comprehensive financial reporting. Advanced designations like Certified Bookkeeper (CB), Quickbooks Certified ProAdvisor, or Certified Public Bookkeeper (CPB) justify premium rates.
Packages and Monthly Retainers
Rather than straight project pricing, many professional bookkeepers offer packaged services or monthly retainers for ongoing clients. These arrangements provide guaranteed recurring revenue streams.
Entry-level bookkeepers may charge $300 to $600 monthly for basic reconciliations, reporting, and filing. Mid-level bookkeepers might charge between $600 and $1,500 covering additional supplementary meetings and advisory services. High-level bookkeepers often charge retainers between $1,500 and $5,000+ for advanced functions like audits, forecasts, and financial insights.
Specialized Services
For specific services like payroll, accounts payable/receivable, inventory valuation, or financial statement preparation bookkeepers may charge fixed one-time rates in addition to base fees. Examples include:
• Payroll Processing – $75 to $150 per period
• Accounts Receivable/Payable – $20 to $75 per entry
• Inventory Reconciliations – $150 to $300 per period
• Financial Statement Drafts – $300 per statement
Value-Based Pricing Considerations
Rather than basing pricing solely on effort required, savvy bookkeepers align rates with the value delivered to clients. Those helping larger companies realize substantial savings through improved processes and financial control justify much higher fees than basic data entry would warrant. Quantify key client outcomes like reduced errors, labor savings, faster reporting, improved planning etc. to validate pricing.
Bottom Line Rates
While the above reflect general industry benchmarks, ultimate rates depend on your specific obligations, target clientele, and business costs. As a rule of thumb, estimate required annual income, divide by estimated billable hours, and add ~30% buffer to determine a bottom line rate allowing reasonable profits after expenses.
Factors like niche expertise, exceptional credentials, high-touch services, and favorable clientele may boost rates above industry averages. Just ensure pricing aligns to client budget constraints and your ability to deliver real material value.
Conclusion
Determining billing rates requires balancing your desired income goals against prevailing market rates, pricing factors, and the value delivered to clients. While general benchmarks provide useful rate ranges, carefully consider your unique value proposition, service offerings, credentials, and clientele when setting pricing. Maintain rates on the lower end initially as expertise develops.
Eventually, rates can ascend to $100+ per hour for specialized high-level services supporting substantial cost savings and bottom-line improvements for client enterprises. Revisit pricing annually while scaling skills and offerings to justify higher rates aligned to growing value levels provided.
